27 February 2015 Last updated at 13:27 GMT
British Airways (BA) owner
International Airlines Group (IAG) has reported a big jump in annual profit and
raised its forecast for 2015.
IAG
reported pre-tax profits of €828m (£601m) for the year to 31 December.
Profits were boosted by the use of new fuel efficient aircraft and what it
called a "remarkable" turnaround at Spanish airline Iberia.
IAG's operating profits nearly doubled to just more than €1bn. It also raised
its 2015 forecast by 20%.
'Tremendous'
performance
Since the formation of IAG through the merger of BA and Iberia in 2011,
Iberia has been undergoing a massive restructuring programme, with jobs and
salaries being cut.
Last year, Iberia made a further 1,427 redundancies following negotiations
with trade unions in Spain, taking the total number of job cuts in recent years
to 4,500.
But the airline reported an operating profit of €50m, compared with an
operating loss of €166m last year.
IAG chief executive Willie Walsh welcomed the ''fantastic''
results
Mr Walsh called Iberia's turnaround "remarkable, both financially and
operationally" adding he was "very proud of its achievement especially its
strong cost discipline".
"In 2013 we said our intention was for Iberia to break even in 2014 and it
has fulfilled that promise," he added.
He added he expected Iberia to continue to improve its profitability given
the trajectory that it is on. "The performance to date for Iberia has been
tremendous and we expect that to continue in 2015," he said.
Shares
in IAG rose almost 5% to 586.50p on the London Stock Exchange.
Low-cost competition
In addition to BA and Iberia, IAG also owns Spanish low-cost airline
Vueling.
IAG said all three of its airlines faced very competitive markets
domestically and across Europe from "the growing presence of low-cost carriers".
BA reported an operating profit of €1.2bn, up from €762m
a year earlier, which IAG said showed "significant progress towards its
long-term targets".
Vueling reported a slight rise in annual operating profits to €141m. It
increased capacity by 24% and added new bases in Brussels and Rome.
Last month, IAG launched a €1.36bn takeover bid for Irish airline Aer Lingus,
but it gave no further details on the progress of the takeover in its results
statement.
The Irish government, which holds a 25% stake in Aer Lingus, is believed to
have concerns over the deal and trades unions have warned over jobs cuts.
IAG chief executive Willie Walsh, told the BBC: "We'll have discussions in
due course with the Irish government.
"I'm very much focused on the fantastic results that we've announced today
and looking forward to developing IAG with the existing airlines and with
opportunities to expand with other airlines."